The Mexican casino market is under intense scrutiny after President Andrés Manuel López Obrador ordered a review of all licenses.
He believes corruption and illicit trade have caused an explosion of gambling establishments in the country.But he believes nothing of the sort has happened since he came to power.
Mexico's interior ministry's Adán Augusto López Hernández said last Friday that former presidents Vicente Fox and Santiago Creel had issued licenses to operate the most casinos in the country's history.He also said that the current administration under Obrador has issued several permits, but that they were court-ordered as a result of legal battles that began before President Obrador took office.
During the six-year period from 2000 to 2006, 6 casino licenses were granted during Vicente Fox's tenure, Lopez said at a morning press conference.He stressed that this is the highest number of casino approvals by any administration in the country's history.
House Cleaning
Obrador interprets the gaming law so that only the federal government, not state or municipal leaders, has the power to issue licenses.And it ordered President Lopez to review all licenses, leading to their renewal last week.
Of the 340 licenses acquired during the Fox administration, 153 were issued while Minister of the Interior was Santiago Creel.Creel is now Speaker of the House and is at odds with Obrador.
López stressed that during his tenure, Creel had granted more permits than Enrique Pena's 6 during his six-year tenure.The figure was also closer to Felipe Calderón's 132 during his six-year term.
Regarding permits from past administrations, Lopez explained that the ratification of permits granted by the Calderon administration to operate 86 casinos is in the process of judicial proceedings.He also said the government is currently participating in five other lawsuits seeking the revocation of licenses.
Lopez added that more casino operators could lose their licenses as the investigation continues.The government conducts 15-20 casino inspections each month and has already closed 47.None of them were operating under a formal federal license, he said.
connection with crime
One reason to monitor the gaming industry is Obrador's desire to reduce the criminal element in Mexico.Many shady and some legitimate gambling dens are a front for money-laundering cartels that Fox has allowed to thrive, according to the president.
One example, according to the government, is the Juegos del Bajío, which was approved during the administrations of Fox and Creel.The casino operator is linked to the brothers José Antonio, Francisco Javier and Óscar Rodríguez Borgio for alleged tax evasion.
Juegos del Bajío could soon go out of business if the government can prove it in court.The government is now seeking court approval to revoke the company's license.
One of the brothers, Francisco Javier, also owns the casino operator Big Bora, which has alleged ties to organized crime and money laundering.The government believes the brothers may have run all their businesses under the same model.
Slumping gambling income
In 2019, the Mexican gambling industry provided the government with tax revenue of MXN 34 billion (US$1 million), according to government figures.A year later, this dropped to MXN9332 billion (US$1 million).
Much of it was a result of COVID-19 and was only a short-term dip. A 2021 Research and Markets study estimated the industry's CAGR of 2026% through 33.
Obrador's desire to reduce the number of licensed gaming venues will weaken this forecast, but not by much.Expansion of sports betting and lotteries will offset these losses to some extent.
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